1) Field of the Invention
The present invention relates to financial data processing and business practices regarding funds transfer. More specifically, the present invention provides a personal payment number (PPN) wherein an individual or business can receive payments from other individuals or businesses without revealing confidential account information or establishing themselves as a credit/debit card accepting merchant.
2) Brief Description of Related Art
With the increasing globalization of commerce the need for safe and secure ways to make payments between individuals, businesses and merchants now extends to systems that provide global coverage and include currency exchange systems. In addition there is a need for these systems to be secure and also to be trusted by all parties.
Existing systems such as systems based on bank checks or bank transfers involve either the payer or the payee revealing details about their bank account to at least the other party. For instance, the recipient of a check sees the payer's bank account and routing information on the check, and with a bank transfer the recipient/payee must provide their account information to the sender/payer. In a global situation where the two parties may have never have met, sharing of such information may be sufficient cause for concern to deter one or other party from proceeding. Also, different checking and bank transfer systems can reduce the effectiveness of the financial transaction.
The global credit/debit card system provides an ideal mechanism for receiving payment but under normal circumstances requires the recipient to be a credit card accepting merchant. Being a credit card accepting merchant may not be cost-effective for some people or businesses wanting receiving payments. Also smaller merchants without a good trading history may have difficulty in being accepted by credit card acquiring banks as credit card accepting merchants.
The ability to receive funds using a simple, rapid and secure system without the need to be a formal credit card accepting merchant will be of benefit to a wide range of users. For example the rise of online auction services (such as those developed by eBay and Amazon) means that many individuals may occasionally require a means of receiving finds remotely, such as over the Internet. Also, the widespread “shareware” software distribution system provides a mechanism for software written by individuals to be distributed on a global basis. Shareware authors are generally individuals that do not have the organizational support to handle global payments. Therefore a system that can provide a global payment solution with no administrative overheads with automatic currency conversion would be very attractive to these as well as many other users.
In the growing global electronic commerce environment many individuals and companies may offer their service remotely over the Internet or other public, semipublic or closed network. Such services (programming, translation, writing, clerical, accounting, web-page design, etc) will typically be provided remotely and not require any direct physical interaction between the provider of the service and the service user. The two parties to such an arrangement may never have met raising the issue of mutual trust. In addition they may be in different countries and this produces problems for currency exchange or incompatibility of bank transfer systems as well legal challenges if a non-payment dispute arises. Again a simple, rapid global payment solution would be of benefit.
The need and value of such a service is indicated by the number of systems that have already been proposed to address this issue. Examples of systems operating within this area include:    Billpoint This service acts as an intermediary between payers and payees, requiring both to sign up to the system. It is operated as proprietary system and is designed for application in the on-line auction house arena.    PayPal This system is another intermediary closed system where the payer registers with PayPal and provides credit card or bank account details. When the payer wants to make a payment he transfers money to PayPal and an email is sent to the email address of the recipient with message that someone has sent you money. The recipient must then register to receive the funds by account transfer or refunded onto a conventional credit card number.    Payme This system sends email bill to users through the Payme site (payee registers with “Payme”), email goes out with a request for payment. The payer pays Payme who transfers the funds to payee.    eMoneyMail In this system the payee goes the eMoney website and pays with credit/debit/account transfer and gives the email address of the recipient. The recipient receives an email with a link back to the eMoney site where they can receive the funds by transfer to a checking account or credit card.    Wire-transfer The provider offers a range of services offer account to account wire transfer such as Western Union and Swift.    Checkfree This system is an example of a bill paying system which requires both parties to be registered with the system.
In many of the above systems the recipient must give either a credit/debit card number or bank account number to a third party (payer or other intermediary). In the case of using a credit/debit card, the payment is made by initiating a “refund” transaction even though there was no matching initial payment since the payment was made another party. There are two key problems with using this refund mechanism:
(1) Within the current card systems (such as Visa, Mastercard and Europay) there is the problem of reverse interchange. This is the process whereby a refund leads to the customer's bank (i.e., the bank who issued the credit card that is being refunded) paying back to the merchant acquiring bank (i.e., the bank that received the refund request from a credit card merchant) the interchange fee (effectively a commission) that would have been kept by the customers bank on the original payment. Since no original payment has been made in the scenario where someone is receiving money from a third party, the customer's bank (i.e., the bank who issued the credit card that is being refunded) is effectively being charged for the transaction at a cost of approximately 1.5% of its value depending on the prevailing interchange rates for the specific credit card. Under the current credit card systems, trying to change the rules for refunds to address this issue will lead to the converse problems in true refunds.
(2) In order to receive funds a user must reveal his or her actual credit card number. These details have the potential to be misused creating worry, inconvenience and potentially financial cost for the recipient. In the case of Internet payment systems, this information is then potentially stored on a server connected to the Internet. As recent fraud scares have indicated, storage of personal details in computer databases linked to the Internet represents possibly the most vulnerable security weakness with Internet based credit card transactions.
In addition, with several of above the above Internet payment services, the recipient receives an email notifying them that someone wishes to pay funds to them. The recipient then follows a link in the email to a site where he/she must enter their credit or bank account details to receive the funds. Clearly a fraudulent message offering a prize, a non-existent payment, etc., could easily lead to innocent victims giving over their credit card details which could then be misused by the perpetrator of the fraud.